What General Counsel and Business Leaders Need to Know
- One National Standard: The U.S. Department of Justice’s (DOJ’s) Corporate Enforcement and Voluntary Self-Disclosure Policy (CEP) creates a national policy for how the DOJ may award companies cooperation credit for the voluntary self-disclosure of corporate misconduct in the criminal context.
- A 120-Day Clock: The CEP gives a company 120 days to self-report after a whistleblower’s internal complaint, signaling that the DOJ may treat anything past roughly four months as untimely—far less time than most internal investigations take to finish.
- Disclosure as a Business Decision: A company’s decision to self-disclose misconduct is no longer just a legal judgment call but a business-critical risk decision that can have real financial and reputational consequences.
In this episode of Speaking of Litigation®, Epstein Becker Green attorneys Zachary S. Taylor, Melissa L. Jampol, and Elena M. Quattrone break down the DOJ’s new CEP and what it means for how quickly companies must investigate, escalate, and decide whether to self-disclose potential misconduct.
Transcript
[00:00:04] Zachary Taylor: Today on Speaking of Litigation, we're discussing DOJ's new standardized corporate enforcement expectations across all criminal divisions, how voluntary self-disclosure now carries clearer but more demanding benefits and conditions, and why companies must rethink how fast they investigate, escalate, and disclose potential misconduct.
[00:00:24] Zachary Taylor: Hello, everyone. I'm your host today, Zachary Taylor. I'm an attorney in Epstein Becker & Green's Health Care and Life Sciences practice, specializing in white-collar defense and government investigations, based out of our Newark, New Jersey office. For years, corporate enforcement at the federal level has felt like a patchwork.
[00:00:41] Zachary Taylor: Different DOJ components, different expectations, and a lot of gray area around what benefit a company would actually get for doing the right thing and self-disclosing problematic conduct. Announced in March of this year, DOJ's new Corporate Enforcement Policy, or CEP, changes that. It creates a more uniform framework for all corporate criminal matters, but importantly, also raises the bar.
[00:01:05] Zachary Taylor: A company's decision to self-disclose misconduct is no longer just a legal judgment call. It's a business critical risk decision which can have real financial and reputational consequences. In today's environment, the question isn't just whether to disclose criminal misconduct, it's whether your company is positioned to even make that decision in time to receive the benefit of that self-disclosure, and that's where many organizations fall short in being prepared.
[00:01:30] Zachary Taylor: Joining our discussion today is Melissa Jampol, member of the firm in our New York and New Jersey offices. Melissa co-leads EBG's White Collar and Government Enforcement working groups. Prior to joining EBG, Melissa was an assistant United States attorney in the Health Care and Government Fraud unit in New Jersey, and an assistant district attorney in the Manhattan District Attorney's Office. Hi, Melissa, great to see you, and thank you for being here.
[00:01:52] Melissa Jampol: Thanks so much for having me, Zach.
[00:01:54] Zachary Taylor: Also with us is Elena Quattrone, member of the firm who is based out of our New York office. Elena's practice focuses on government investigations and white collar defense for health care and health care adjacent entities, such as dietary supplement companies, but she also has significant experience across a diverse array of industries. Hi, Elena. So glad you could join us today.
[00:02:13] Elena Quattrone: Hi, Zach. Thanks for having me.
[00:02:15] Zachary Taylor: So to get us started, Elena, could you briefly explain to our listeners, what is this new and corporate enforcement policy from DOJ?
[00:02:22] Elena Quattrone: Sure. So the DOJ's new CEP, the Corporate Enforcement and Voluntary Self-Disclosure Policy, it creates a nationalized policy for how the DOJ may award companies cooperation credit for the voluntary self-disclosure of corporate misconduct in the criminal context.
[00:02:41] Elena Quattrone: So it incentivizes companies to voluntarily disclose discovered misconduct, to cooperate with DOJ investigations, and to timely and appropriately remedy discovered wrongdoing in exchange for “credit,” typically a declination of prosecution or a non-prosecution agreement. So under this policy, companies can effectively be rewarded for, as you said in the intro, doing the right thing early, but the rewards are earned and not given.
[00:03:13] Elena Quattrone: So there's a framework to follow and circumstances such as when companies learned of the misconduct, how egregious the conduct is, and business decisions related to the disclosure will impact how and if a company decides to disclose the misconduct and the potential credit that may be awarded to them for disclosing it.
[00:03:36] Zachary Taylor: So the DOJ's kind of touted this, the CEP as their new, this new policy they're having. But, you know, based on what you described, how much of this is really just a reorganization of DOJ practice as opposed to some new policy?
[00:03:48] Elena Quattrone: Right. I think that's the most meaningful aspect of this new CEP, is that it isn't really new. It isn't a change in substance, but really a change in scope.
[00:04:00] Elena Quattrone: So previous to this policy, the DOJ's approach to voluntary self-disclosure was more fragmented. More fragmented between Main Justice and various US attorneys’ offices nationwide. So those office policies were often similar, but not necessarily uniform, and some US attorneys’ offices had policies whereas others didn't.
[00:04:24] Elena Quattrone: So this new CEP replaces that previously fragmented framework with a single department-wide policy that's applicable to nearly all criminal components, except for the antitrust division, which often functions differently. So it isn't a change in substance as much as it's really a change in scope.
[00:04:45] Melissa Jampol: And I would just say that we really found clients frustrated by the former patchwork policy. We had clients that would self-disclose to one district, and they would have, that district of a US attorney's office would have a policy, and then we would have clients that needed to self-disclose to a different US attorney's office and there was no policy whatsoever and no benefit for them in having disclosed. So the new policy and the uniform way that folks can have a set of guidelines is going to be super helpful.
[00:05:19] Zachary Taylor: And that's a great point, the uniformity being that it allows consistency in the approach. And so to that end, Melissa, you know, as we're kind of getting into the meat of the CEP, you know, can you walk us through now this uniform policy and how it approaches these various concepts like voluntary self-disclosure, what full cooperation is, timely remediation, and kind of how those concepts interact, and then the impact of what seems to be a very important piece, is the aggravating factors that influence what the ultimate outcome is from DOJ's perspective?
[00:05:51] Melissa Jampol: So the voluntary self-disclosure in the CEP policy is built around three escalating tiers of outcome. Full declination, what they call the near-miss path, and what doesn't fall into these categories. Full declination is the most desired and the most difficult to obtain outcome if a company is self-disclosing.
[00:06:13] Melissa Jampol: It requires that four conditions be met. First, that the company voluntarily self-disclose to an appropriate criminal component. This implies that the voluntary self-disclosure must be made early, often before all the facts regarding the misconduct are fully known, or before the company has completed its full internal investigation, or sometimes even without any internal investigation whatsoever.
[00:06:37] Melissa Jampol: And other factors might be considered here, such as whether DOJ already knew of the conduct, whether the report was made in good faith and timely. And of course, all of those things are in the eye of the beholder very often. Second, that the company fully cooperates with the Department of Justice US Attorney's subsequent investigation.
[00:06:59] Melissa Jampol: Full cooperation can take a lot of different forms and is going to be earned through specific cooperative actions. Some things to consider in what constitutes full cooperation would be a proactive disclosure of individual misconduct, which we've seen starting with the Yates Memorandum and moving forward, and this would result in an important business decision, if this may mean providing evidence against the company's executives or employees who are still employed with the company.
[00:07:30] Melissa Jampol: And it also includes proactive identification of evidence, effectively what would help the Department of Justice build its case. Third, that the misconduct be timely and appropriately remediated by the company. The Department of Justice is looking for concrete evidence of change and evidence that the problem is fixed so it won't happen again.
[00:07:51] Melissa Jampol: And we've seen this in recent DOJ guidance over the last few years, where self-remediation is really encouraged by the Department of Justice and other agencies who put out guidance such as HHS/OIG, for example. And that what they call no aggravating factors be present, which could be determined by the nature and seriousness of the offense, the egregiousness or pervasiveness of the misconduct, and the severity of harm, sort of echoing the Justice manual's view on, you know, liability for corporate entities.
[00:08:28] Melissa Jampol: So even if aggravating factors are present, prosecutors in the Department of Justice will still retain discretion to either recommend declination or not, holistically weighing the severity of the aggravating circumstances. And this is really where the personalities of the individuals at the Department of Justice are going to come into play, and where all of us who are advising companies on whether to disclose need our own crystal balls.
[00:08:57] Melissa Jampol: So the practical takeaway here is that when thinking about how these factors interact, is that each factor is dependent on the other and, you know, Elena, you often say this, self-disclosure without full cooperation won't do it, whereas full cooperation without remediation and self-disclosure won't qualify, and performing specific criteria won't do it. So it's, you have to be fully into self-disclosing. I sort of always say it's either you're pregnant or you're not. You're either in self-disclosing or you're not, and those kinds of factors are definitely in that analogy is super helpful in determining whether you're going to self-disclose or not.
[00:09:40] Elena Quattrone: Yeah. It's like an all or nothing approach committing to the self-disclosure, for sure.
[00:09:46] Zachary Taylor: And to that end, Elena, you know, what Melissa just described, obviously there are some concrete aspects to it, right? You have to disclose, you have to remediate, you have to cooperate. But it seems to me as I, you know, I hear Melissa talk about this, it's does the CEP actually reduce uncertainty for companies, or is this really just a formalization of DOJ's discretion? I mean, at the end of the day, you could do all these things, and to Melissa's point, the AUSA you're talking to doesn't buy it, doesn't believe it, doesn't think you've done enough.
[00:10:16] Elena Quattrone: Yeah. I like what Melissa said about, you know, cooperation is, it's in the eye of the beholder, right? And in this case, we're talking about the DOJ entity to whom the company decides to disclose. And I think ultimately there's still uncertainty, you know, as there is often a potential for disagreement about what was actually self-disclosed versus the actual misconduct uncovered in an investigation. And of course, there's always potential for disagreement about what constitutes full cooperation and whether all those factors are met dependent on who's receiving the information.
[00:10:51] Melissa Jampol: What we often see, Zach, is that the timeliness of the self-disclosure is something that comes up frequently in these. As outside counsel, we know how slowly a lot of companies move, just because of the way that they're structured or the way in which data can be reviewed or documents can be reviewed or people can be interviewed, and the timeliness of the self-disclosure is often debated with the Department of Justice, even before this policy came into effect.
[00:11:23] Zachary Taylor: Timeliness raises two things. One, it's like you just said, the internal aspect of the company and how do they get timely, investigate, how do they report, you know, how do they know that? And then the other side to that, and, you know, and I want to come back to that, but is really this, where is this misconduct and the timeliness of understanding the misconduct coming from? And I know one of the big things here is, how is data analytics from the DOJ's perspective, right, impacting these decisions and disclosure of this data set, right?
[00:11:53] Zachary Taylor: How is that impacting CEP? And Melissa, I don't know if you want to weigh in there, and I think that'll lead into how that impacts companies, right? So on one end, the DOJ's investigating and using their data sets, and on the other, there's this self-disclosure piece and the timeliness related to that. So I don't know if you have some insight on kind of that process and how you think it's going to impact companies moving forward in this.
[00:12:17] Melissa Jampol: Zach, you're completely right about that. We've seen nonstop messaging from the Department of Justice about the use of data analytics over the last few years that has only accelerated since the new administration took over and DOGE was introduced. The use of data analytics by DOJ is an enforcement trend that is definitely picking up momentum, and the government is increasingly able to detect misconduct quicker, or not even detect misconduct, detect billing abnormalities or outliers or places to start. You know, I sort of always say data analytics is a great place to start, but it is not the whole story.
[00:12:57] Melissa Jampol: It is just the tip of the iceberg, and there can be very innocent explanations as to why someone is an outlier. They're just, like, a really hard worker, or they don't take vacations ever. And we're really encouraging companies to utilize their own set of data analytics. We really see the growth of data analytics through DOJ's recent announcement of the FOCUS initiative.
[00:13:22] Melissa Jampol: The Department of Justice has invited data miners to meet with the civil fraud section to discuss signals that correlate to fraud, and this could impact simultaneous parallel investigations because we know, in the health care section, that the civil and criminal health care cases are very often parallel investigated.
[00:13:45] Melissa Jampol: The Trump administration has been effectively deputizing members of the public to act as fraud investigators, particularly through more reliance on data analytics. And we saw back in February of this year, the Department of Government Efficiency, or DOGE as I referred to them earlier, unit working within HHS, released to the public a large data set of Medicaid provider claims-level data from 2018 through 2025. And as long as data miners are out there, organizations have another reason to double down on the use of data analytics in their compliance programs. That way, companies can identify and fix their errors before a government enforcer or a whistleblower comes knocking.
[00:14:32] Zachary Taylor: Yeah, I think that's the interesting piece when you think about all of these different aspects of the new DOJ and the interactions between them. And, you know, when you look at this data analytics piece, as you said, deputizing private citizens to help data mine, and then companies having to respond to that and be prepared, you know, the escalation can be fast.
[00:14:55] Zachary Taylor: And you know, Elena, as we think about this, right? We think about this impact of now potentially the DOJ is getting more efficient and quicker. To Melissa's earlier point, may not be the right information at the start, but it's an outlier. You know, a cardiologist has more stents than anybody else, but they're the number one stent person. Of course, they're going to be an outlier. But that's also causing the company to have to respond. So do general counsels and chief legal officers, do they need to rethink their internal reporting and kind of their escalation timeline in light of these issues?
[00:15:30] Elena Quattrone: Yeah, and I think... So thinking about the use of data analytics, which as Melissa sort of focused on, that it might not always, it's a starting point for the government, but it does not necessarily tell a full story, right?
[00:15:43] Elena Quattrone: But it might give enough information to the government to want to proceed and start investigating deeper, even though there might be a completely reasonable explanation for why the data is showing what it does. But I think when you think about the CEP, you know, this new policy, it definitely speeds things up with regards to when companies need to disclose any sort of suspected misconduct with its unrealistic timeframe. So I think that's something that GCs need to be aware of when they think about internal reporting and the escalation timeline in light of this new policy.
[00:16:21] Zachary Taylor: Yeah, I think that's exactly right. You know, these timelines, while a normal person reviewing them will go, "Oh, you know, you have months to do something."
[00:16:27] Zachary Taylor: Well, investigations take time, obviously, right? So, but what does timely self-disclosure realistically mean? You know, based on that, the fact that investigations can take a significant amount of time depending on the scope and context of them, do people still exist at your organization, et cetera, what does that mean for companies?
[00:16:48] Elena Quattrone: Yeah, it's a great question, and I think one that really resonates for me and shows that the tension, really sort of highlights the tension between what the CEP requires and what actually happens in practice, in practicality with regard to internal investigations.
[00:17:04] Elena Quattrone: I mean, I think the three of us, that's a lot of what we do. It's what we love to do, is represent companies in those difficult situations. And I think what we know from our experience is that, and I think in looking at this policy, right? The policy doesn't specifically define what timely is, right?
[00:17:21] Elena Quattrone: It suggests that DOJ wants to keep that open to maintain flexibility in their approach with determining whether to award credit. So it suggests that the approach companies should take with regards to whether disclosure is appropriate is when the company has something credible and factual to disclose, and not when an investigation is necessarily complete with every I dotted and every T crossed, which, you know, as people who work with companies that are being investigated, a lot of times that's what companies want, right?
[00:17:55] Elena Quattrone: You want to finish the investigation, get the full picture before you present the information to the government, and under this new policy, that might not necessarily be practical or even acceptable to the DOJ.
[00:18:09] Zachary Taylor: YYeah. I mean, the idea of leaving a loose end can feel scary for a company when they're going to, you know, talk to the Department of Justice.
[00:18:16] Zachary Taylor: But the question then right now that's a balancing, a framework of, have you done a substantial investigation enough you feel comfortable making that report or that disclosure, or do you feel like you have to do more? And if you're uncomfortable as an organization, you know, are you effectively penalized for waiting too long to confirm misconduct before disclosing? I mean, where's the balancing act?
[00:18:38] Elena Quattrone: Yeah, and I think the answer is companies could be, right? Depending on the circumstances. But I think it's not so much “penalize” as much as it's more so that companies may not be eligible for the relief that they would ultimately be seeking, or all that DOJ might be willing to give under this new policy if they wait too long to disclose. Especially if after companies assess the situation, you know, they determine that they are in a good position to disclose, but a lot of time has passed.
[00:19:10] Elena Quattrone: And I think it's important to note that the one specific timeline the DOJ does give in the CEP is in regards to the whistleblower context, in regards to whistleblowers. And the CEP sets forth that when a whistleblower or where a whistleblower makes both an internal report to the company and also a submission to the DOJ, so the DOJ is aware of the whistleblower's report, the company can still qualify for a declination, provided it self-reports, it also self-reports to the DOJ as soon as reasonably practical, but no later than 120 days after receiving the whistleblower's internal report.
[00:19:51] Elena Quattrone: So even though the DOJ is giving this guardrail in the whistleblower context, the principle, we think, can be extended to what DOJ may consider timely in a non-whistleblower context. So we deduce here that perhaps beyond four months of learning about misconduct might not be considered timely in the DOJ's mind and could jeopardize the relief that a company is seeking.
[00:20:16] Elena Quattrone: And I think as we all, I would assume agree, four months is nowhere near enough time to conduct a full internal investigation, and, you know, might not even be enough time to even identify all the people that you necessarily need to speak to, let alone make contact with those people. So we're talking about a tight timeframe.
[00:20:37] Melissa Jampol: Well, it's worth also pointing out, Elena, that the assumption here is that whistleblowers tell the company that they're reporting things to DOJ. [laughter] And that, I mean, everybody on this call is, like, smiling at this point because that almost never happens.
[00:20:53] Elena Quattrone: Totally.
[00:20:54] Melissa Jampol: And they usually do not want to know that, you know, let the company know that they've reported to DOJ because they want their qui tam filed under seal or something like that.
[00:21:05] Melissa Jampol: So I don't know how this is actually going to work, but I think that the assumption that it's going to sort of roll over into a general view of what is a reasonable report timeline is there, and I wish they would've just spelled that out. You know, they've given other unrealistic timelines in other guidance that they've put out in terms of their corporate compliance guidelines and what they think is a reasonable report, and I'm a little bit confused as to why the Department of Justice did not incorporate that into this.
[00:21:36] Elena Quattrone: Right. They maintain discretion, right? They they have more flexibility that way.
[00:21:41] Zachary Taylor: And Melissa, you know, you have a unique position not only in the serving clients in this space for a number of years, but having sat on both sides, right? Being both in the DOJ and now serving corporations that are looking to disclose and leading internal investigations.
[00:21:55] Zachary Taylor: You know, you raised this issue about how are we even going to learn about the whistleblower complaint? You know, what are the other practical gaps that you've seen between what we're seeing as DOJ expectations that may be vague or unclear or undefined, and then how companies are actually operating, both in their response to their own internal reporting and then how they would respond once they've identified an issue and they decide to self-disclose?
[00:22:20] Melissa Jampol: Zach, I think the number one issue is this concept of what “reasonably prompt” is. That, you know, a company's view of what reasonably prompt, and the real world's view, and what the Department of Justice's view, can be very different. And, you know, especially if you are dealing with somebody at the government who has never worked for a company, who has never been on the outside of the Department of Justice, really, and they don't understand how things work in terms of, you know, getting data, wading through people's cell phones, dealing with bring your own device policies versus company-owned things, the use of apps to be able to communicate now.
[00:23:04] Melissa Jampol: I mean, there's off-channel communications. There's a lot of factors that go into this, and really also the consideration of cost and how much an internal investigation is going to cost for a company. So, you know, I think as we've repeated on this podcast, I think it takes a while to get to the bottom and come to conclusions, and very often things on their face might seem like they're a problem, and then when you delve into it, it's actually not.
[00:23:33] Melissa Jampol: Because in the world of health care fraud, where there's 1,000 CPT codes, it's really easy to make mistakes, but that does not mean that it rises to the level of mens rea to be able to prosecute someone for health care fraud. And I think that, you know, companies want to be able to know, okay, is this an innocent mistake or is this knowingly and willfully done?
[00:23:55] Melissa Jampol: And that takes a while. Takes experience, and it takes analyzing facts and data and unguarded moments of truth, of people's text messages and their emails and looking at data and dealing with, you know, outside vendors and things like that. But I really think it's important to have policies in place with respect to some of these things, is to be able to have a firm policy.
[00:24:23] Melissa Jampol: If you have people bringing their own cell phones to the office place, having a bring your own device policy in place, having investigations policies in place, being ready for, if you're a health care entity and you're getting a subpoena or you're getting a grand jury subpoena or you're getting a HIPAA subpoena or you're getting a CID or you just have a whistleblower complaint that you're tracking down, to be able to roll right into an internal investigation so that you do meet this concept of reasonably prompt.
[00:24:56] Zachary Taylor: I think that's a great piece of advice is the proactive approach and not just being reactive. And as you see kind of the shift in these policies and the application of the CEP, which we can get into now, being able to respond quickly because you don't have to go through the whole process from start to finish.
[00:25:15] Zachary Taylor: You start with boots on the ground and you're running because you know exactly what steps you have to follow. I think that that's a great piece of advice. So Melissa, to that end, you know, you're showing this kind of juxtaposition between having to be prepared, the cost, DOJ's expectations. You know, if you're a company looking at this, does the CEP make self-disclosure more attractive because there is uniformity, or does it make it more risky because now you have to decide how quickly you can do something, how accurate that information is, and other, you know, decisions you have to make with regards to exposure of the company?
[00:25:51] Melissa Jampol: So it gives us a framework to be able to evaluate whether self-disclosure is appropriate in a given situation, and I think that that's very useful for companies, even though it is so highly fact-specific. So for some companies, it may make self-disclosure a more attractive option, especially because there's precedent that shows that DOJ will grant declination if the requirements are met. And we've seen that in March of this year, where the DOJ notified a foreign medical device company and its subsidiary for violations of the FCPA, and they declined to prosecute them.
[00:26:30] Melissa Jampol: Interestingly, it was in the FCPA context where we've seen that, the unit, sort of really shrink in this environment, in this new administration, as well as the fact that it was a medical device manufacturer, and we can take that steed to our health care clients as well. The company was noted to have timely and voluntary self-disclosure, full and proactive cooperation.
[00:26:59] Melissa Jampol: The Department of Justice noted the nature and seriousness of the offense, the company's timely remediation, the absence of aggravating circumstances, and their agreement to disgorge the amount it made from the misconduct, which was only $1.2 million, which in the realm of what we look at in these cases, is really small.
[00:27:20] Melissa Jampol: So I think maybe that weighed into some of the factors as well. But, you know, the Department of Justice in that case found what they labeled as conclusive evidence of bribery, allegedly. And found that there was no reason to prosecute the case and they declined to prosecute. Now, I will note that there's still, in the public-facing materials, allegations that two individuals involved in the purported scheme have been indicted and are facing prosecution. So it does go back into the Yates Memo and the Department of Justice's emphasis on individual culpability in these kinds of situations.
[00:27:57] Zachary Taylor: Yeah, and, you know, obviously we're looking at a single instance. It's a press release, so you don't have the same facts that you would get if this case had gone to trial and you could review documents.
[00:28:08] Zachary Taylor: And so Elena, you know, with that in mind, right, we have this one snapshot, but how should companies weigh the certainty of these DOJ expectations, which it seems from that, you know, that case that Melissa just described, seemed to follow the tree, kind of identical, right, if you walk through CEP policy. Against uncertainty of what the actual outcomes will be… I mean, in this case it worked out for that company, right? But there are a lot of factors to consider. So what are your thoughts there?
[00:28:33] Elena Quattrone: Yeah, and I think it goes back to the fact that, as Melissa said, right, the CEP sets forth a framework to follow and for assessment. So I think, you know, following… as we see more precedent cases sort of making the news and we can monitor what the facts are considered by the DOJ in those cases. I think the fact that we have a recent case is a great example of that, so that companies can follow sort of a template as far as, you know, what to assess and just based on the limited information that's out there publicly. But it does give a framework to follow when assessing misconduct that might be discovered at the company level.
[00:29:13] Elena Quattrone: But I think ultimately, a threshold question for a company to consider and when they're entertaining self-disclosure under this policy is, you know, whether the company can satisfy what's required and how quickly they can do that. So in some regards, I think it's almost a leap of faith to self-disclose because ultimately, too, the company may not have full transparency into what the DOJ already knows or what, again, they'll… they maintain the discretion, right? So what they'll consider to be fully cooperative when assessing whether to award declination.
[00:29:47] Zachary Taylor: So I think that leap of faith analogy is really great. And Melissa, you know, building on that, do you think we're going to see more disclosures under CEP, or are they just going to be faster, where people are saying, "Oh, I need to get something in the door," Because what Elena raised, they're concerned DOJ is already aware, and if we don't get out there in front of this, it's going to be a bigger problem.
[00:30:06] Melissa Jampol: I do think it puts an incentive out there. It definitely gives a carrot to companies to self-disclose. Another factor that I think is important, even though it's on the civil side, it's certainly in health care cases, where civil and criminal are very often investigated in parallel fashion, and increasingly so over the last few years, is the Department of Justice's newly announced reforms to accelerate the review of False Claims Act qui tams alleging fraud against federally-funded state-administered benefits programs such as Medicaid.
[00:30:42] Melissa Jampol: That new policy provides a sixty to 120 initial timeframe for review of FCA qui tams that fall into this category. And at the conclusion of that review, the department will decide whether to permit the relator to proceed with the action and assume primary responsibility for litigating that action, subject to the government's ongoing supervision and ultimate control of the matter, to conclude the allegations warrant further government investigation, and there's no CIDs or other process served. Or three, determine that the qui tam should be dismissed under 3730(c)(2)(A) authority, which we've heard from folks at the civil side of the Department of Justice, they are much more inclined in this administration to exercise because the allegations lacks adequate specificity or are legally deficient.
[00:31:37] Melissa Jampol: But we also note that under this new department policy on the civil side, they have affirmatively stated that all new matters involving federally funded public benefit programs will be promptly referred to the criminal division or the new National Fraud Enforcement Division for evaluation of potential criminal violations.
[00:31:57] Melissa Jampol: And I think that that's important information for any company who finds themself in this situation. Additionally, which is also super important, any new matters alleging public benefit fraud will be shared with the effective agency to evaluate potential administrative action, including payment suspension.
[00:32:18] Melissa Jampol: So in the health care context, that's super important, and folks should be ready for their administrative attorneys and their administrative toolkits to be utilized in these fact patterns.
[00:32:30] Zachary Taylor: So, I mean, it sounds like, you know, kind of looping everything together, right? Being prepared, having policies in place, understanding this, being comfortable and familiar with the CEP itself and the decision tree, the elements that are involved there, and understanding that things are moving quickly and there's incentives at various agencies to work harder and faster with more data, and the proactive approach.
[00:32:52] Zachary Taylor: Obviously getting with counsel to handle any one of those elements is crucially important for a company. And as we kind of get here at the end, I just want to, a takeaway for our listeners. You know, for the general counsels or chief legal officers that are listening to this podcast what is a concrete step they should take to make sure their organization is prepared under the CEP? And Elena, Melissa, I offer it to either of you.
[00:33:14] Elena Quattrone: Yeah. There's a few takeaways I think that we can highlight to our listeners and the GCs out there that are concerned about this new policy. I think, too, you know, we talked a lot about obviously the criminal policy, but also the changes on the civil end, right, of this new administration.
[00:33:32] Elena Quattrone: And I think it's just important to highlight, too, that recovering on fraud remains such a top priority for this administration. And, you know, we work a lot with health care fraud and defending on health care fraud. And as you can see from what we've talked about, there's just a lot of initiatives right now to make that a top priority, specifically health care fraud for this administration.
[00:33:53] Elena Quattrone: So, you know, it's just something to think about because you can see that the DOJ is devoting so many resources to trying to combat and recover on improper activity in this space. But I think in regards to the CEP, you know, even though the DOJ has clarified and formalized, you know, this path for favorable treatment when criminal misconduct is discovered and disclosed, as we talked about, the DOJ and the individual prosecutors in charge of a matter may have different expectations as to what cooperation looks like, and failure to meet those expectations could still result in a more traditional enforcement response.
[00:34:32] Elena Quattrone: So ultimately, you know, internal compliance and investigative processes to investigate allegations of misconduct or reports of misconduct, that still remains paramount, along with detecting and investigating potential misconduct when it's discovered or reported, is really important. But again, so are having policies in place for timely remediation, and now adding to all that, decisions on self-disclosure, because this is an option for companies that might become aware of this type of activity. Melissa, do you have anything to add?
[00:35:07] Melissa Jampol: Yes. Thanks, Elena. I think that compliance, compliance, compliance is key. And thinking about compliance in 2026 or 2027, what does compliance look like now? And certainly the Department of Justice and all of the federal agencies who've weighed in on this, is that adopting data analytics is something that companies should definitely consider depending on the maturity of the compliance program that a given company has.
[00:35:39] Melissa Jampol: It also requires that corporate compliance functions have structures in place that are capable of servicing concerns promptly, and where there's an environment where people feel comfortable internally raising issues, making sure you have a hotline, making sure it's monitored, things like that. And when you're using data analytics, think about what the government's using and try to replicate it if you can. Again, given the stage of the maturity of a compliance program, identify anomalies and help detect and remediate any potential misconduct.
[00:36:15] Zachary Taylor: Well, Melissa and Elena, thank y'all so much for your time and insights. And thank you to our listeners. We hope that you found this session to be informative. If you found this discussion helpful, make sure you subscribe to Speaking of Litigation on YouTube or wherever you get your podcasts from. Have a great day.
[00:36:31] Elena Quattrone: Thank you. Thanks, Zach.
[00:36:33] Melissa Jampol: Thanks, Zach.
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